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A BILL TO BE ENTITLED
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AN ACT
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relating to the administration and operation of certain trusts. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 111.0035, Property Code, is amended by |
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amending Subsection (b) and adding Subsection (c) to read as |
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follows: |
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(b) The terms of a trust prevail over any provision of this |
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subtitle, except that the terms of a trust may not limit: |
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(1) the requirements imposed under Section 112.031; |
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(2) the duties and liabilities of and restrictions |
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placed on a corporate trustee under Section 113.052 or 113.053; |
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(3) the applicability of Section 114.007 to an |
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exculpation term of a trust; |
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(4) the periods of limitation for commencing a |
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judicial proceeding regarding a trust; |
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(5) a trustee's duty: |
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(A) with regard to an irrevocable trust, to |
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respond to a demand for accounting made under Section 113.151 if the |
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demand is from a beneficiary who, at the time of the demand: |
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(i) is entitled or permitted to receive |
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distributions from the trust; or |
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(ii) would receive a distribution from the |
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trust if the trust terminated at the time of the demand; and |
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(B) to act in good faith and in accordance with |
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the purposes of the trust; [and
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[(C) under Section 113.060 to a beneficiary
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described by Paragraph (A) that is 25 years of age or older;] or |
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(6) the power of a court, in the interest of justice, |
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to take action or exercise jurisdiction, including the power to: |
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(A) modify or terminate a trust or take other |
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action under Section 112.054; |
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(B) remove a trustee under Section 113.082; |
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(C) exercise jurisdiction under Section 115.001; |
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(D) require, dispense with, modify, or terminate |
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a trustee's bond; or |
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(E) adjust or deny a trustee's compensation if |
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the trustee commits a breach of trust. |
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(c) The terms of a trust may not limit any common-law duty to |
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keep a beneficiary of an irrevocable trust who is 25 years of age or |
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older informed at any time during which the beneficiary: |
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(1) is entitled or permitted to receive distributions |
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from the trust; or |
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(2) would receive a distribution from the trust if the |
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trust were terminated. |
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SECTION 2. Section 113.060, Property Code, is repealed. |
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SECTION 3. The enactment of Section 113.060, Property Code, |
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by Chapter 148, Acts of the 79th Legislature, Regular Session, |
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2005, was not intended to repeal any common-law duty to keep a |
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beneficiary of a trust informed, and the repeal by this Act of |
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Section 113.060, Property Code, does not repeal any common-law duty |
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to keep a beneficiary informed. The common-law duty to keep a |
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beneficiary informed that existed immediately before January 1, |
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2006, is continued in effect. |
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SECTION 4. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2007. |